If you live off your dividends the way I do, what you should remember is not to muck about trading too much. You should buy your stocks for the longer term and do little in the way of trading. I have little trouble living off my dividends.
I have talked to people who are depending on dividend income or wanting to build an income portfolio and are constantly worried about their portfolio. They buy and sell to get the right stocks and therefore are constantly changing the makeup of their portfolio. They do not seem to progress as quickly or as well as I did. I leave mine portfolio alone.
When I was building my portfolio and now living off it, I just buy. I only sell when I really had to. I could not touch my portfolio for 6 months or a year and nothing much would happen. I have done that in the past when I was building my portfolio and had other things I had to do.
Not all I bought were winners of course. I would try out different stocks to see how they worked. Often when they did not work all that well, but were still producing income I just left them and moved on to different stock. So I do have some bits and pieces of shares but overall, the portfolio is doing what it should. That is producing an growing income for me.
You are not going to have a perfect portfolio. I certainly do not. However, nothing much is happening in my portfolio. It gets me through good times and bad times. Some stocks do better than others. Every time there is a bear market, some stock will cut its dividend. However, others will not and some will increase their dividends. It is often hard to tell years in advance how stocks will do. But you can do greater damage to your dividend portfolio by always changing it then leaving it alone.
No matter what you do you do, if you invest in stocks you will have winners and losers. If you accept this, you might do better at investing. You may not get a perfect portfolio, but you can get a reasonably acceptable one.
I wrote yesterday about Melcor Developments Inc. (TSX-MRD, OTC-MODVF)...learn more. Tomorrow, I will write about TransAlta Corp. (TSX-TA, NSYE-TAC)... learn more on Wednesday, March 23, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Hidden Half of Nature by Montgomery and Bikle. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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